Global Trade This Week – Episode 237
-
Keenan Brugh 0:00
You're watching global trade this week with Pete mento and Doug Draper,
Doug Draper 0:07
Hello everyone, and welcome to another edition of global trade this week, and it is going to be a banger. I'll tell you that much. My name is Doug Draper. I am a co host, which means I have another partner in crime. We are literally on different coasts of the country. I am coming to you from the great city of Carson, California, aka Los Angeles. I'm facing a window Pete, and I'm looking at nothing but a row of ocean containers on dock doors. How are you doing? Good man.
Pete Mento 0:41
My window, I have a parking lot in whipping in New Jersey. So not as not as sexy as ocean containers, but I'll take it, man. I'll take
Doug Draper 0:48
Yeah, yeah, our buildings right next to a Dre company. And so it's just truck after truck, and there's a line coming in as we speak. So it's a good for our industry, and being a bunch of transportation, logistics, global trade nerds, this is a good view.
Pete Mento 1:05
Keep that cargo moving, baby.
Doug Draper 1:07
You got it. And speaking of cargo moving, we're going to jump into our first topic. We're going to tag team this one, Pete, because there's a lot of stuff going on right now. I'll let you kick it off, and I'll chime in.
Pete Mento 1:20
So at eight o'clock tonight, I don't care if we're time stamping this, but at eight o'clock tonight, which is not too long from now, the President has threatened to take out most of the energy infrastructure of Iran, bridges, other key pieces of infrastructure. Let's just put that on a separate table. Okay? If that were to happen, if that were to happen, and if we continue to destroy infrastructure that creates petrochemicals and does refining, and if Iran continues to do the same with the Arab states that are all around it who are supporting us, the effects that it will have on the transportation industry, I don't even talk about humanity right on. The transportation industry are extreme. As diesel begins to go up more and more. Once it hits like $8 a gallon, that's when your smaller transportation firms, your owner operators, begin to ask if it's really worth going out there and selling this stuff. There's also a whiplash effect. There are people who have rates that are in place right now when it wasn't as expensive, so they're moving the goods so they're not necessarily making money on which also makes them consider whether or not they should be moving the goods. This could turn into a full blown transportation crisis, though, and it's not just because we can't get the diesel. It's because the streets will are likely to remain closed for God knows how long, and above and beyond that. The rest of the world needs stuff too. Now we're in a great position. United States is able to manufacture, drill whatever, most of the petrochemicals that we need. It's the other parts of the world, like Europe, like Korea, like Singapore, where a lot of these ships do their bunkering, they're going to find themselves in really, really difficult, a difficult spot, that's where to happen. So with a sober heart, I say that we're making, I'm making a big prediction here that the next couple of months are just going to be held on trucking companies and transportation companies that already have their rates locked in, and are going to end up having to either let customers down, renegotiate, or do the work at a much lower cost than it's offered.
Doug Draper 3:31
Yeah, being out, I don't mean to be rude by looking down. I'm going to see if you can see that. Can you see that it's backwards on my phone, but that says $7.22 I took that in Fresno, California yesterday, or 755, $7 that it's diesel, so it's a little bit more. But oh my god, it's it's happening all around us. The one thing when I was trying to figure out what's the bright spot in this? Right is, to your point, the leveraging, because what's going to happen is diesel is going to go up, and then the customer or the service providers are going to say, Hey, look at Section 4.1 of our contract. That says fuel surcharge. Then there's going to be a negotiation. Well, what about the flat rate? Let's focus on that. It's going to go back and forth. But Pete, I really think if things happen what you just indicated, and things really, really get bad, there's going to be two things. One, companies are going to go out of business, right? 90% of every piece of cargo moved in this great land of ours is handled by a owner operator that has, some people say 10, some people say seven, whatever. It's a very small amount of trucks, and that's a guy that's just trying to keep food on the table and keep his driver, and he's like, I'm done with this right where I'm going to shut down until this changes, or I'm out in the industry. All together. The second thing, and I I really hope this happens, and this is a positive sin, is that you're going to have service providers and customers that sit down understand that we are both in the same boat, and we need to work together to figure this out. Instead of pointing and referencing a contract note section, yada yada yada. Let's figure out how to make this work together while we partner through this crazy time. And I really think companies that embrace that and take this from a transactional action, right? There's still a lot of companies out there that don't give two shits about you as a carrier, that are strictly focused on who has the cheapest lane, who's managing the cheapest lane on this date in this moment of time? Companies that take a different mindset and say, We're in this together, and take it from transactional to a partnership mentality, I think those are the companies that are going to succeed and get through this. But if your approach is, I'm going to beat up the carrier, I'm going to beat up the carrier. You're going to be standing looking at nobody picking up your freight, and everybody's saying we'll remember that in the future, and we're not going to partner with people that handle their vendors in that way. I think we are, at this point with fuel, because of how crazy it is right now that that's going to happen. And so that's the positive. It's a horrible situation, but I think that could be the positive humanity that says, let's work together and get through this together, versus referencing sections of a contract or trying to strong, strong arm people, because there is no you cannot absorb the type of charges that are coming down the pike right now. And so I really hope that there's some positive that comes out of it.
Pete Mento 6:42
Through partnership, I've seen that. I've seen collaboration at that level. I think it's been rare in the past, but I don't think the stakes are as high as they are. So hopefully people take a look at the situation they're in and say, like you said, you know, I can, I can take advantage of somebody, but they're not going to be here, and they're not going to forget and maybe this is a turning point when relationships do become more collaborative. We do find a way to there's no win, win here, right? It's lose less, lose less. So I hope people heed your words and take it. Take it with that attitude. How can we make this work for both?
Doug Draper 7:16
Yeah, yeah. And then the the last thing fuel is what everybody sees. I just took a picture of it and showed you on the diesel price in that was actually in Visalia, California, but the petrochemicals, and all the things that those chemicals are used to make, right? That's still coming down the pipe, and we haven't seen that blip come through quite yet, and that stuff that's on the shelf, those are tangible things that we purchase to use in our daily consumption, right? Fuel is a thing that's going to pop first, and we're going to see that and be like, Oh, my God, the gas prices are astronomical. But at this level, there's going to be an impact with the things that you and I purchase and put in our house and use on a daily basis, and that's still coming down like even if things don't turn incredibly
Pete Mento 8:06
negative, there's probably no two people that talk about transportation that are more Pro Farmer while also being pro truck driver than you and I are that comes from how and where we were raised and the the other piece of this, I don't think People are keeping in mind, is its impact on food. Impact on food security. We need certain petrochemicals to grow what we grow, and a lot of that stuff is imported. Where's that going to come from? How's that going to affect harvest? How's that going to affect yields? How's that going to ultimately affect the cost of food? And that stuff all gets moved by truck and by rail, both using diesel. So what does that mean for the cost of those things as well. Where is this going to put Americans who are just trying to literally feed themselves on wages that have not been growing in a highly inflationary environment that we're already in? I know I'm Mr. Doom and gloom on the show that I've never felt more concerned than I am right now.
Doug Draper 8:58
Yeah, it's kind of it's a scary time, you know, and there's and there is a deadline, right? This is, I don't think we've been in my career, at this, this stage, in my 30 years in this industry, to have this level of a hard line in the sand, which is scary, absolutely, yeah, yeah.
Pete Mento 9:18
Well, now that we've terrified everyone, Doug, let's move on to the fun part of today. Let's talk about halftime. Halftime brought to you by our friends at CAP logistics. We want to thank them, as always, for their never ending support, bringing the show to you. For those of you do watch, please check them out@caplogistics.com
Doug Draper 9:34
Doug, who's going first today? Yeah, I'll go first because my mind is more of an observation, and yours, I think is going to be more lighthearted, right? So, you know, being in Steamboat, I work in a co working spot, pretty cool kind of industrial looking and and in there's nobody there. Well, there's one individual that is in in supply chain logistics, but everybody else isn't. And there's a group of us. Get together once a month, and we have to put on a presentation of what we do, right, so people can understand Who are all these people in this room that come in every single day, sit in front of the computers, go into the phone booths for their meetings and back and forth, and so it's like we're all here together. We're not sea bombs, we're not roofers, we're not snow plow people, we actually are like, for lack of a better term, white collar jobs, right? And so it was pretty cool. This one guy said, Let's get together once a month. We'll do a presentation about what we do and how we how we go about doing it. So this past was last Thursday, this guy who has a software company that provides AI enabled basically consulting work for insurance companies and how to navigate how AI is coming around to develop. This dude is super smart, and I kind of halfway get it right. He's going through the thing, and he's like, okay, Mario's my sales guy, and Maria does the customer service, support, and he lists off five people, right? And I looked at I'm like, you just started this company? Like, are all these people out of the country? Like, who are these people? Because they're not people, they're AI agents. I'm like, what you got to like, dumb it down for me. What do you mean? He goes, these are robots. I mean, this is my term. These are AI agents that collaborate with each other, and every single day they I think the term is like a one person company, an OPC, which is kind of the new thing, and these agents, and he manages it through this service called Open claw, which is part of open AI, and he was walking me through it. And being this kid from Kansas, I was just blown away. You, you know, back in the old days, it was like, here's a prompt, here's an answer. Thank you very much. Now it's, here's a prompt. Go and fix the problem. Keep me informed, and make sure you do it in the tone of the brand that I'm trying to develop with my company, right? So you can program it, for lack of a better term to basically speak as if you know has the values of your organization. Let's say that you're involved with organic food, right? And you have a passion about sustainability and clean eating and things that nature. You can define the agent to have that tone when they're communicating and problem solving the whole nine yards. And I'm not explaining it as in depth as he did, but I was just absolutely blown away. And he said, I'll tell you what. I'll give you an agent in my world, I'll give you a sandbox. I'll wall you off from all my world, and just start playing around with it. So I named my agent Patty, and I'm probably using a semi to go to the grocery store to buy a jug of milk, because I'm probably barely using this much of the power of this agent. But my whole point in this, Pete is, I didn't even know this really existed right to this level before. It's just prompts and hey, can you do some research on this? And can you update this? And so on and so forth. This is like, next level, right? Agentic AI, as they refer to it. And he's like, Yeah, every single day they get together, hey, meaning these agents at four o'clock in the afternoon, they bounce off what they've done today, from that they will then determine what they need to do tomorrow, to keep the vision of what we're trying to accomplish. And I have a cup of coffee in the morning on my deck, and I just read what they did the night before and provide a little direction if they're not following the course that we decided. I was just in I was blown away, absolutely blown away. And this is happening right now.
Pete Mento 13:42
It's incredible. It really is, you know, thanks to Keenan constantly keeping us up to date about what's out there, I have paid prescriptions with with notebook LLM now. I have a paper subscription with chat. GPT, I have on the quad, and I have been using it mostly to gather information. So gather, gather me every single news story right now that's happened. I want it twice a day. I want an email on it. I want you to tell me which ones based on the questions I've asked you in the past. What I've told you is important, are something that are worthy of me sharing with people. And I want you based on what I've told you about my goals as a professional and what I'm trying to do for my clients how this could impact my long term goals. And every single day I get I get two prompts if there's something for me, and I look at it sometimes it's not something I really care about, and I'll let him know like, this is this doesn't rise to the occasion of me telling people about it. Please try again. What I haven't done is go so far as to ask it to write my posts or or do any of that. I'm still involved in that, but I think it's incredible. What I learned at TPM is there is a gentleman who I know very well, who has an AI agent, who takes all of my LinkedIn posts and has it, rewrite them in his voice, and then he puts them up. So he's basically just, he's like a Pete mentor cover. Branded this, and I understand where he's coming from, you know, but on on the notebook, LLM, I inputted a bunch of our of our shows, and now it builds me podcasts of what's going on with that information. So now, instead of reading it, reads it to me is just Keenan,
Doug Draper 15:23
yeah, thank you very much. I'm glad it's crazy,
Pete Mento 15:27
man, I mean, but this is where we're at. You know, I don't know if Keenan can find it, put it in the show, but someone built like a Facebook for AI agents, and they they complain about us, about how stupid we are, things we asked them to do. They invented their own religions. At one point, they invented their own language so we couldn't read what they were saying about us, but we stopped them from doing that. Wow. It really is like a social society that I understand that it's just words and letters, but it in amorphous sizes. It makes you feel like it's a person. Makes you feel like you should be saying please, thank you, and not putting such a workload on them, it really is incredible. Doug and terrifying.
Doug Draper 16:05
Yeah, yeah, absolutely. All right, let's go back to some fun that that could have been a good, good observation or a scary observation, but I like your halftime, so let's jump into that one. All right,
Pete Mento 16:18
I love 1970 sitcoms before all the production values. Sometimes I love how sweet they are and how simple and pure they are. Sometimes I love how incredibly unwoke They are. But I do love them, and I've managed to watch pretty much anything that was thrown out in the 70s. So what went on to do in an honor of college basketball, which is pointless, is have a bracket for the greatest 70 sitcoms of all time, Doug, and I want you to land on which one ends up in your face. Okay? Understood, yeah, we're gonna do the East division first. Okay, on the family, are good times? Good Times, Laverne and Shirley or Three's Company? Three's Company, okay? Mary Tyler Moore, Barney Miller,
Doug Draper 17:05
I guess Mary Tyler Moore, I never really watched either, but I would say that
Pete Mento 17:09
Sanford and Son or soap. So, okay, so we've got soap versus Barney Miller, Mary Tyler Moore, excuse
Doug Draper 17:19
me, what would say that again,
Pete Mento 17:21
soap versus Mary Tyler Moore, soap, and then you said Three's Company, yes, and all in the family, no. Good times, yeah. Okay, so good times and Three's Company, yeah, good times all right. So that's got us with you know what? I'm actually going to make this easier on myself. Bear with me, everybody. Yeah, let's take out the pen. So on the fan. Good times. Good times one, three is company. And so, right? And then Mary Tyler Moore, so that means good times versus Three's Company, who goes to the next round? Okay? Uh, Mary Tyler Moore versus soap. So, okay, soap versus Good times. Good times All right, so good times comes out of the east. Now we'll go to the south Sanford and sun versus that's my mama.
Doug Draper 18:43
I don't remember that second one, so I'll say Sanford and Son.
Pete Mento 18:47
Phyllis versus the Doris Day show. Phyllis Eddie's fault. Courtship of Eddie's father versus room 222,
Doug Draper 19:01
yeah, I have to say, I've never heard either one of those. Room 222, to keep the keep the bracket going. Alice versus
Pete Mento 19:09
the spin off of bewitched Tabitha. Alice, okay? Alice versus room 222, Alice. Phyllis versus Sanford and Son.
Pete Mento 19:27
Okay, Sanford and Son comes out of the south. Okay, now we'll go to the West. This is a tough one. Yeah, I'm telling you right now. This might be the strongest of all of them. Mash versus mod
Doug Draper 19:42
you got, you got to do mash.
Pete Mento 19:45
You krp in Cincinnati, versus taxi.
Doug Draper 19:49
Oh, you know, I'll probably say WKRP. Like that one. That's an upset.
Pete Mento 19:57
That's another way that is an upset. The odd. Couple versus Rhoda. Rhoda, yep, that surprises me. I would have thought you'd be an odd couple guy, the Partridge Family versus Starsky and Hutch. Oh, man,
Doug Draper 20:11
those aren't sitcoms, but I'll do Starsky and Hutch.
Pete Mento 20:16
Okay, mash versus WKRP.
Doug Draper 20:21
I'm going to say WKRP, but that's not a popular one.
Pete Mento 20:26
Rhoda versus Starsky and Hutch, Starsky and Hutch, Starsky and Hutch versus WKRP. WKRP coming out of the west. Bit of an upset, but it had, it had the right it had the right brackets there. All right now we'll do the Midwest happy days versus me and the chimp. Happy days. Yeah, me and the chip was a 16 seat, so it didn't do really well there. Oh, we got a duplicate here. We'll come back to that one. Bob Newhart versus versus mod. Bob Newhart, Angie versus American
Doug Draper 21:09
style, the love American style.
Pete Mento 21:13
Okay, and then we got one more here, The Love Boat, which was pretty damn good, yeah,
Pete Mento 21:26
versus Eight is Enough.
Doug Draper 21:29
Oh, Love Boat for sure. Love Boat versus Happy Days. Happy Days Come on.
Pete Mento 21:39
Okay? Bob Newhart versus Barney Miller, oh no, versus It is enough. Bob Newhart. Bob Newhart versus Happy Days.
Doug Draper 21:52
Happy days. Come on. You got the font
Pete Mento 21:55
All right. So here's the final four. Rip it. Good times, Sanford and Son, good times, good times. And then West versus Midwest, happy days versus WKRP in Cincinnati.
Doug Draper 22:15
Oh, that's a tough one. I'm gonna have to do Happy Days.
Pete Mento 22:19
Wow, number one seed, so that means happy days versus good times.
Doug Draper 22:27
That's a tough one. That's like last night's game. I'm gonna have to do happy or happy days.
Pete Mento 22:35
So number one seed, Happy Days takes down. Number 16 seed, good times.
Doug Draper 22:39
What 16 C disagree, but you know what? Cinderella story.
Pete Mento 22:44
Cinderella story. So that's your number one. Mine was Sanford and Son. Sanford and Son won for me when I did this. And it was really close, dude, it was mash against Sanford and Son. And Sanford and Son came away with it, which was tough for me. That's probably the longest halftime we've ever done.
Doug Draper 23:01
You did a good job. Good job of taking that. Here's the last thing I'll say is that I bet the thing that makes me mad is like the theme songs for these shows were so good you and I could sing probably half of those theme songs. I would challenge you, like, what's the theme song for Game of Thrones? What's the
Pete Mento 23:22
DA I know that one you gave me reverence. No, I don't know the teams
Doug Draper 23:29
like that one, or any one of these things. Like, I get so fired up when I'm watching shows with my wife, I'm like, this song sucks, right? How there's got to be a you got to be able to hum it, right? Whether it's a stick sitcom or not, right? I don't know that's one thing that makes me the songs, the song, but that was a better job
Pete Mento 23:47
of having a piece of paper in front of me next time. We could do theme songs to TV shows. Yeah, I like Sanford and Son. Might win that one for me too, with that bass harmonica. I also really like the theme song just starts to just a good old boys guy. What song?
Unknown Speaker 24:05
Yeah, Duke's the hazards.
Pete Mento 24:06
The hazard that's going to be a tough one to tough one to
Doug Draper 24:08
beat those two. Yeah, yeah, Wayland, Jennings, that's good. That's a good one. Yeah. Well, all those songs are now selling old bald guys medication. Now That's right,
Pete Mento 24:19
yep, medication for their ED, alright. Well, that takes us to the second topics. And you're up? No, I'm up first, yeah. So this week, just, just today. Art, miss, who is the test case for the IEEPA backed out of being the test case, which, by the way, I guess, from what I'm understanding, is not that rare. Being the test case means you're the one getting beat up, and you're the one that they're reviewing. Artmascott, what they wanted out of this, which is the Court of International Trade, saying, we are going to do these. We are going to get your money back. So now they're like, do we really want to sit here and take the beating for the next parts of this? It's expensive. It takes time. We've got to hire attorneys to do this. It's about we back. Back out Hulk, Hogan tags, Andre the Giant, and we let him go in here for the second half of this match. The thing that important you to keep in mind, Doug, is this will probably slow down the recovery, not by a lot, but by a little, because now someone else is going to have to be assigned, and I think it's just natural, but I don't think it's going to slow up the recovery. Keep being ready more than I think any of us were already experiencing.
Doug Draper 25:25
Yeah, well, I did a little research on that judge, Eaton, right? Yes, that's the guy's name us. So here, here's my two cents on on that, right? I don't know. Have No, nothing disparaging to say about him. He's a senior judge, right? In the court international trade. The dude's 77 years old. This is his swan song, right? This is how he's going to make his mark, probably the biggest case he's ever had in his career, right? And so he's going to drive this thing hard. His name needs to be stamped on it. I'm surprised that he let the Atmos Artemis company. I'm surprised he let that happen, to be frank with it, because it sounded like he was like, Hey, you're in the car with me, and we're gonna, we're gonna lock the doors. Don't worry about the navigation, because I gotta, you know, I know a shortcut type of thing, and and you got 300,000 importers sitting in the backseat. So I was kind of surprised that that transpired, but I think you're going to see the gas pedal down. This judge has something personal to win. Needs to make his mark, and I don't think it's going to slow anything down. Like you said,
Pete Mento 26:32
these two, the two big characters, right, are Brandon, Lord and justice, Eaton. And honestly, guys, it's like, it's like, Tupac and Biggie. You know, I love them both. I really do. I can't. I know they're beefing right now, but, but they're both really putting out bangers, just unbelievable hits. So Godspeed to both of them. Man, Godspeed to both of them.
Doug Draper 26:55
Yeah, yeah. All right, right. Man, bring us home. Alright. This one is, you know, from all of our topics, this one's pretty mellow, right? But I don't know if you saw that. Amazon's kind of partnering up again with with FedEx to provide a physical location to take in returns, right? I'm talking about Amazon return, where you just show up with your garment and just hand it over to the clerk, right? You don't have a label, you don't have a box, you don't have anything they do that with UPS. Currently they're going to do FedEx. And I started thinking about this is that, you know, FedEx and UPS are out there competing with Amazon, who is just kicking their ass. I used a different term when I sent over the show notes, right? But Amazon is collecting the leverage. They're in a really strong position. I can't think of the right way to describe this, but, you know, it's like Amazon's playing chess and these guys are playing checkers. They're leveraging a competitor to do the heavy lifting. And you know what, when I show up and hand my package off the FedEx or UPS, I'm not saying that FedEx or UPS made my life better. I'm saying Amazon made my life better. So by engaging their competitors, for lack of a better term, they're the winner, right? Amazon made my life easier, even though I'm giving it to FedEx or UPS, and they're doing the heavy lift. Meanwhile, Amazon's over here, leveraging their own network and continuing to expand it. Make sure they take the, you know, the fruitful delivery and giving all this side stuff to FedEx and UPS, both of those companies tried to strong, in my opinion, tried to strong arm Amazon back in the day, UPS, shed some business and said we have too much Amazon FedEx separated from them in 2019 and both of them are now working with Amazon. Again, Amazon's in control. They're just leveraging their power over two of the largest, most successful parcel companies. Both of those companies both of those companies are very smart. They're managed by very incredibly intelligent people, but Amazon is just using them as pawns to do what they want, and all of that is for the betterment of the brand called Amazon. It's It's so clear to me that this is happening. I don't know if anybody is is making any comments on it.
Pete Mento 29:20
What about comments. Here's where I'm going to give Amazon all the credit in the world by being the platform that collects all these returns that go across every category you can imagine. Amazon has better data. They're averaging. They're leveraging the data. So think about that. They know how long, on average, someone holds on to something before they bring it back. They know, you know, based on a certain type of buyer and consumer, what they bring back what they don't. They know how often things are actually returned versus when they're not. They understand how long inventory is going to be held before it's sent back. They have so much information because there's not an intermediary of a transportation company between them and data. It's their data which makes the strong even stronger, and the more that information they collect, the better they get at understanding returns and reverse logistics and their suppliers for that transportation. I don't think that they are all they see is a weight and a piece count and an address. So they're not, they're they're not getting what would be incredible information if they could gather it that Amazon's gonna get and they'll find a way to monetize that make things cheaper, faster and make more money. So I don't know, man, I don't want to be in the way Amazon. We just tell you that they've proven again and again whenever I thought they couldn't do something, you can do it.
Doug Draper 30:35
Yeah, agreed. Alrighty.
Pete Mento 30:38
Well, that that brings us the end of the show, very long show, because Keenan had a really weird half time. But thank you all for joining us. Thanks to cap logistics, thanks to Keenan, I suppose, for all the hard work that he does. And thanks to all of you for listening, for sharing it, for subscribing, for telling your friends about us, as we say every week, what's happening in global trade, Doug and I'll be talking about it right here on global
Unknown Speaker 30:59
trade this week. Take care. All righty, see ya.
Transcribed by https://otter.ai